tv Trending Business Bloomberg August 29, 2016 9:00pm-10:01pm EDT
♪ is tuesday the 30 of august, and this is trending business. i am rishaad salamat. ♪ rishaad: we are taking you to tokyo, singapore and soul. , aree asking the question there signs of life in japan? we are beating estimates, giving abenomics a much-needed lift. saying their president did not put production before safety.
and apple facing attacks of billions over the sweetheart in ireland. let us know what you think of our top stories. that is my handle. use the hash tagged there as well. trending underway in hong kong, shanghai in about 30 minutes. other markets starting off, but getting a nice tailwind from what we saw on the streets. juliette: in wall street, the street of dreams, certainly doing better. we are seeing something on the back of those moves we saw in the u.s. market. of course, solid gains, defeating record highs. banking stocks leading the way. --terday, it was a desire dire position. it left wall street and they had to catch up. 0.2%. up have a look at the korean cost i index, up kosp
0.7% and the one is up -- won is up. certainly some of sides coming back into the korean market. we have had economic data in japan and of course the nikkei is up a little bit. considering it is 2.3% gained yesterday and the dollar-yen is fairly unchanged. that fall that cannot unexpected. in australia, good moves to start the session, up 0.4%. seeing gold prices coming up. new zealand holding onto 0.2% gain, coming up from where it was on the open on the back of the wall street close. looking at the kiwi-dollar, we have building approval, or building permits coming through today. 0.9%, down more than expected. we also had the reserve bank and
the governor speaking today, there is no need for zero interest rates in new zealand, although they are preparing the markets for more cuts. the kiwi is up 0.1%. and speaking on the japanese yen, fairly unchanged. 101.92. market: japan's tightening unemployment for a third consecutive month. they are falling less than anticipated. the latest economic data out of japan. printing a positive story at least. or against. here is sherry. dark -- job's market tightened even more, unemployment falling to 3%, which would be the lowest since 1995. there were also 137 positions for every 100 jobseekers, the to applicant ratio
since 1991. you can see that sharp divergence in the figures of starting in 2000 with the unemployment rate can continuing to fall. there are more jobs available for more 100 jobseekers. a very healthy labor market. the hope now is that low unemployment will be through wages, the boj's effort to reach 2% inflation target, but they are quite far from that. the steepest year on year drop in july since march 2013. that would be the month before unprecedentedhed stimulus. the good news is japanese people seem to be finally opening up their wallets. household spending was less than expected in july, dropping half a percent on the year. you can see 0.2% in the negative, and compare that with this fall back in june. retail sales also month on month.
they grew more than expected, rising 1.4%. this also beats the sharp increase from june numbers. still too early to say, the japanese economy. this was largely expected as japan experienced a hotter summer. and they have more holidays and weekends days in july. rishaad: thank you very much. we do value your opinion. you can talk to us on twitter. now a fatal hailing down disaster. it avoided the laying any blame. neither company made any comment. question to this paul allen. what does this business actually say? au --
bad: it is a pretty decision. the foundation for future dam raises. as the wall raises, design changes are made. this structure began to increase, and the report of tremors on the day of the collapse may have accelerated the problem. of dollarslions breaking free, hundreds of people killed, villages destroyed. this was brazil's worst environmental disaster on record. the original designer of the dam is pleased he was not blamed. -- in designr alterations caused the breach. there is some stuff about this report. there was no evidence production was prioritized over safety, and they are conducting an order of all of the dams. there is no indication this particular dam was about to fail, rishaad.
rishaad: thank you for that. paul allen from sydney. let's look at the chinese airlines. a slew of them coming up with results. here are what we are covering for you today. >> we are watching for results from air china, expected out 30 minutes from now. we could look at a hit from the flagship carrier, but fuel costs will be lower and traffic is increasing. they are likely for a similar story, the china east airline which also posted. the yuan appreciated against the dollar, making it the worst performer in asia. +, chinese air workers are trying to trim debt and the traffic is growing at the pace twice more than europe. the cost of jet fuel dropped 30% in the same time compared with last year. staying with the travel industry
, these products rose to one point $2 billion in the first half. this is in line with estimates. this comes just over $100 million, down slightly year ago. the company was not immune from the currency. the ceo told bloomberg he expects better results in the second half, particularly from china. >> i would say that most markets seems to be delivering smaller growth.single digit in north america we are also expecting similar growth in europe and in asia. there were some weaknesses in the first half in china. china came in flat in the first half. but we are expecting high single-digit growth in china in the second half. rosalind: and the latest property in macau is not drawing in crowds.
it is drawing lackluster crowds of new terrorists. -- tourists. it felt slow recent to other openings, and he's a premium customers with this $4.2 billion result could mainly from the other casinos in macau. .ambling is on the decline betting has dropped 36% over the last two years in macau. rishaad: still ahead, betting on gold. can we hold on to the haven appeal as rate concerns grow? more on that later. and dropping for a fifth straight month, discussing that and more ♪. ♪
attract more shares from offering international companies. let's get the details outside that has haslinda amin has. this could compete with other forces and help singapore compete with hong kong in particular, right? haslinda: that is right, hong kong in particular. singapore will be more attractive ipo market for bigger foreign companies. it has been introducing rules in recent years to get more listings, for example, commodity companies can ipo here without record. to makeual structure is the single market more attractive. i want to show you this particular chart. it shows how singapore, especially this year, has done better than the rest of southeast asia in terms of listing. but those are not big ipos, and that is the target for singapore like manhattan united, they listing in new york because it
allows them to keep control. these shares are, in the u.s. technology companies like google says it allows them to push for innovation to grow without being pressured from new investors. angie: shery: haslinda -- rishaad: haslinda, there is stuff about this dual class compromises in singapore. what is the view? haslinda: you are right, governance is the key issue. but like the u.s., singapore is taking steps to address those concerns. dual class shares will be underrated, there will be various safeguards, hopefully enough to mitigate the risk associated with such a structure. i want to point out one thing. dual class will now be available, he will not be the exception. new listings will have one
share, one vote structure unless there is a compelling reason to change that. thank you. let's go to steve davis, with wealth management. what do you make of this debate, and is singapore going down the right route with it? honestly it is difficult to say. it shows the inherent conflict shareholdersetween who want the advantages of being quoted on markets and giving the access to capital but without having to compromise in terms of control, which is not great for minority shareholders. it is a debate going on on a global basis for a long, long time. singapore is just reflecting that ongoing discussion. i can't say i would think most pension funds and other managers would be terribly excited by this. that may will be reflected in the valuations attached to companies with that type of delisting. -- geo-listing.
it is also about liquidity and volatility. steve: that is correct. again, what you see with companies that have two tier shareholding structures, you have activity in the underlying publicly traded one, but much less so in the reserve stock. that is obviously deliberate. as i say, not something i think that most professional money managers would be terribly attracted to and indeed, probably they would have some issues with their trustees accordingly. rishaad: let's go to what is happening as far as markets, equity markets. this is insisting equities are like the least attractive or the least unattractive asset classes. we have seen what is happening in the u.s. when near records are gained.
how does that translate to this part of the world longer-term or in the medium-term, i really should be asking? at least as far as asia and emerging markets are concerned, it still looks relatively attractive. you have markets like india and vietnam which still have very compelling great stories. the advantage from that perspective is steady growth at of the united states is broadly .ositive this is both regional and international. in broad terms, stable equals good news for a number of asian and emerging markets but much less so for places like europe and japan, which still have problems. rishaad: i will come to japan in a little while, but emerging markets have been dean to be the big that beneficiary -- have been seen to be the big finale
she -- beneficiary. is that all done, or is it all talk more than anything else? i think that the key thing to watch over the next couple of months will be the degree to which the dollar not as the case may be. the stronger u.s. dollar tends to be relatively negative for asian and emerging markets given the degree to which, in broad terms, currencies are taken. if the u.s. dollar remains relatively strong, then from a competitive part perspective, that is conferred emerging markets. in the price in some markets, yes. in other places, there is a long way to go. we like parts of the aussie on region -- asean region. rishaad: before we go to break -- steve -- steve: still a favorite is
vietnam. we have been able to hold that one for a long time, see no reason to change that. ino like what is going on india. changes to the central bank government structure is to slightlyutral positive. that is a favorite. rishaad: if you would hang on with us, he is here, we will have more from the fed talking about japan and more. ♪
as the entirety of august, heading for northeastern regions 20 -- devastated by the 2011 earthquake and tsunami. more mitsubishi cars have failed to meet their claims economy figures. mitsubishi tries to revise data and make consider compensating owners. the suzuki models met or exceeded their claims. the u.n.n that from building, trying to depreciate with indicators. there is a premium on selloff options. and this weekend's g-20 and the fdr concerns the market -- concert -- currency market in october. let's look at what is moving.
things are sticking around with us. big day.riday, jobs report could be one of the most critical we have had of late. steve: yeah, it is funny how often that phrase seems to get thated out, but i do agree this data is important, and the fed will move in december or september. if it is up to 200,000, obviously the rate increase will increase proportionally. rishaad: are they looking for an excuse to raise rates now? are the itching to raise rates? they said they need to have rates at decent levels, and they can cut them. yeah, exactly. it gives them a little bit of leeway to cope with the unexpected.
i think the noises that we seem to be getting from the federal reserve seem to be recently talents to. -- balanced. janet yellen is a little more hawkish in recent speeches. i think that it seems a little bit unlikely that they would move in september given the u.s. election calendar. it seems much more likely in december. if we look at it in its entirety over the next six months or so, rates will be going up, but probably not by an enormous amount. maybe a total of 25 or 50 unless the data is incredibly strong. andmentioned the election, with the participants being complacent, then we know where that question goes. what are they pricing in in that case? at the moment, markets seem to be anticipating we are getting a
hillary clinton victory. as we get closer to the beginning of november, obviously those opinion polls will have much greater weighting. and in the past over the summer, the record of opinion polls is not predicting outcomes, not successful. i'm not putting money on either candidate at the moment. is the u.k.er to election last year and the brexit vote in june. at what was look going on, it was within the margin of error of most polls, actually. perhaps emerging markets got it wrong because they were thinking clearly that britain was going to remain. on., come bloomberg forecast, your 92%istician was forecasting likelihood of the u.k. voting to
remain. so join the club, we all got it wrong. [laughter] rishaad: i won't possibly comment. i am just saying, this is the case. what is the big thing for you looking at the end of the year now? , it really does come back to the acronym tina, there is no alternative. we are still looking to be remaining relatively towards equity. it gets uncomfortable from time to time. in a low interest rate environment, still looking at equity valuations which absent one or two vacations, still looked relatively compelling. if you overlay that with a backdrop of relatively steady u.s. growth, which will eventually filter in to a more global basis, the outlook is reasonably positive. that should be reflected in
portfolios. rishaad: do you invest in japan? steve: we do, but we are significantly underweight. i feel that the currency moves during the course of this year have been a wild and unpredictable, really in logical terms, you should look at again around100 -- the yen 100, 150 where it is trading. the central bank governor seems to be struggling to generate that inflation number that they are looking for as we saw in data at the end of last week. it is a far from compelling story. with the strength of the yen undermining corporate earnings growth, that is something they are struggling with for a while. thank you very much indeed. he is the cofounder and ceo actually, just the founder. we have got to take a break, but we will look for corruption in
♪ rishaad: looking at top stories, japanese retail sales jumping 1.4% in july. that was ahead of estimates and is a welcome trend policymakers. they were spending less than expected, a flat 3%. the economy struggling for momentum, but the yen has gained. that is tied with his this investment. report last year into last ore's deadly taming, iron in brazil has resorted to not laying blame.
the collapse was brought about by bungled attempts to fix structural damage, killing people and contaminating land and waterways. and the field of billions of euros, with the imminent release of investigation into dealings in ireland. the european commission claims legal aid or illegal aid in return for jobs. such a ruling will raise tensions between europe and the united states. state of the market, seeing hong kong slightly higher at the start of the session. and looking at shanghai. juliette: look at this. what a nice picture for tuesday morning. we are seeing every market tracking higher, even japan, which was lower. it had a really strong rally during the session, up 2.3%. the yen little changed. it is following its peers, going
higher. ksospit be in korea -- and korea has snapped, about .7 of 1%. that is low yesterday when it was that worst-performing asian currency. in shanghai, and upside on the open to the tune of a third of 1%, solid gains coming through in hong kong. there is not only one stock on the hang seng, the 50 in the red. other stocks doing well, up by 2%. australia also having a very solid session. we are awaiting building approval numbers for the month of july, and in new zealand, we saw a drop coming through in new zealand link permits. they were down 10.5%. also the reserve bank of new zealand, the government saying there will be no need for zero rates in new zealand. looking at stocks coming
through, earnings down 1.5% in early hong kong trade. first half adjusted in income, falling to $3 trillion. we had the company ceo on earlier saying they see difficult times for samsonite, now it has changed. southern down, and air china down. here are the other big movers. centralize to management. it is trading high in sydney as it is being held on a strong profit and revenue beat. new zealand oil and gas up 6%. that is after it said it would buy back 40 million shares. rishaad: let's go to tokyo and get more on what she was making reference to. this is data coming out of japan. of theive us a rundown
household spending numbers. with a be shinzo abe slight sigh of relief. reporter: a little bit of relief. on-the-job side, it is looking good, 3% unemployment, which was better than expected. and also behind unemployment, good news. the percentage of women in the workforce, and women participation was the highest in july in japan for 66%, a good number. on the household spending, not good news. it was down for the fifth straight month. also we are seeing retail sales year on your down 2%, not as bad as expected, but not a good number. that was a bit more weekend than july -- weakened than july. rishaad: is it just a flash in the pan? these are not great numbers, as you mentioned.
is it perhaps the start of an upward trajectory? what do they think? jodi: they think these are temporary. the weekend and sales, july was an oddity in the month of the calendar. driver foron't see a spending. they see consumers holding tight because they are getting slight of weight gain. and with that again, there has ,een little cause -- the yen there has been little cause for businesses to invest in japan. so the household spending number continues with that trend. rishaad: business investment did not exactly improve even when the yen was weaker than this. with the boj, we have the policy 20thw, the meeting on the taking place. what are we looking out for? jodi: certainly lots of anticipation. we are seeing some analysts,
including one from you bf wealth management group saying we could have massive easing next month, or a change in the inflation target. we are expecting anticipation, something will happen, we will see some policy action even with that review. governor kuroda over the weekend in jackson hole raised those participations further when he said there is ample room for action in all three dimensions of these things. they have not run out of room trying to quiet the critics. some analysts have said the boj may have reached the end of its policy broom. weak dataeek data -- and the length from the inflation target, it puts pressure. rishaad: let's move to the other stories we are following. with air asia, they are looking
forward with great optimism. this after a stellar first half of the year. we have been rising more than 40% in the second quarter. looking at fuel prices and passenger demand going up. profits to the carrier at $80 million compared with $60 million last year. india.re very bullish in it is substantially lower than competitors. and that indonesia and the .hilippines bearish they are especially bullish on the philippines and indonesia also seeing in the government, we are quite bullish. with all of the effort, our associates, we will get the bulk of it than in india. but we are surprisingly short of aircraft, so we are policing the market as well for demand. rishaad: staying with aviation, mitsubishi says this is the first of mystically designed
airline. designedically airline. they have no idea when this will fly again. they had to be aborted because of a problem in the air conditioning unit. mi shakeups have seen this delivery putback 2 -- put back to 2018. cooling demand with cheap oil and a glut of twin aisle aircraft. could raise prices 2% last year, and over 3% this year. demand has fallen on cheap jet fuel. carriers that have old planes keep them rather than retire look for more fuel-efficient aircraft. the second-in-command has put a investigation into this chairman. and tax evasion at
one of south korea's biggest conglomerates -- conglomerates. thisould, peter, jeopardize the entire investigation? guyr: he was the number two at low bank. according to the company, he supervised overall management, so basically you was running it. so the prosecutor felt questioning him says he ran the operation, would help them determine and verify some of these allegations. unfortunately, because of this untimely death, local law professors that we spoke to believe that the investigation either will be scaled back or dropped altogether. in any case, their key guy who could help them is now dead. rishaad: this is not the first time, is it? investigation, someone dead.
our questions being asked? peter: it is not uncommon here for somebody under investigation particularly for a high-profile probe, to commit suicide. and often, once they have committed suicide, the investigation is dropped. it is a bit alarming. we had obviously the most notable one was the former president who committed suicide by jumping off a cliff after he was questioned by prosecutors on allegations of bribery. there have been a number of cases like this. is quite alarming. it is almost as though it has become a practice in corruption cases. ask, artyou could authorities doing something about it rise in corruption cases? yes, this death comes as south korea is about to implement their anti-graft law, takes effect next month. this was passed mainly to weaken
the practice, common practice here, of wining and dining clients, government officials, even teachers. they want to limit it to about ,0,000 won for meals, $27 won for gifts. the feeling is this law could perhaps gete and rid of they believe this culture that may emanate from this practice that we haven't south korea. -- have in south korea. rishaad: joining us there from seoul. a golden opportunity. this appeal, and even the face of a rate hike in the u.s. ♪
♪ rishaad: these are the latest business flash headline. we have an estimate of profits on least. this is a 40% surge in box office sales in china, $600 million. ,he company operating cost rising 67%. china remains on top of the united states as the leading movie market for next year. with numbers in china after meager gains from other lenders. led --ve bad loans and bad debt. slower increases in nonperforming loans in the second quarter with the bank of communications warning it is too early to say the worst is over for those bad debts. makers largest sportswear
is asking national brands to burnish his image. they are looking for brand the sales have grown more than 30% each year. the sportswear industry seeing a boom even in the slow down as .eople engage in sports up to $270 million better than analyst calculations. look at what is going on with oil. we are seeing a tumble, growing up the will of producers to supply news. we have a reporter in tokyo. crude down 3% since entering a bull market, but we also had a bull market a few weeks before that. we are going to this informal meeting, taking all the trappings of a formal meeting, in algiers next month. talk about a projection freeze on the table once again.
people would agree if it did not make any difference, because they don't want to cut off their noses to spite their faces. >> you are right. there has been tremendous role attila the in the oil markets last month. it has been a roller coaster ine -- tremendous volatility the oil markets last month. it has been a roller coaster ride. ais was like us -- it was bull market august 18. that was three weeks after a bear market. a lot of this volatility is around speculation and the formal opec talks next month in algiers. basically, there is a lot of speculation they may agree to freeze output. we will have to see if that happens. earlier this year, similar talks broke down after i ran did -- iran did not participate in doha and other companies decided not to agree because iran wasn't there. we will see if market conditions
are better for some sort of agreement. rishaad: what about volatility of price? will discontinue? many people say it is this range, between 40 and 50. perhaps it goes on. aaron: right, that is one thing a lot of people seem to agree on. we will see more volatility. there was an oil conference in norway. we had bloomberg news spoke with executives from konica phillips and statoil. we will see volatility. there is market volatility, the market is beginning to become more balanced in the second half of this year, but we'll see if that table is is prices at all. there is -- if that stabilizes prices at all. and future supply could increase prices in the long term. but in the short term, volatility is driven by speculation over the opec talks scheduled next month.
we will see if they can come to agreement to freeze output. rishaad: thanks for that. looking commodity economist in singapore, and talking about oil and the opec meeting, what is the likelihood of a production freeze taking place? of freeze would only happen if it was in everybody's interest and they agreed to it. that is unlikely to happen. at theou just look history itself, there was one image back in 2000 that if you cut production by 2000 -- that is really in the face of intersection. bringing the cuts back itself, market watchers, with the korean debt, a formal recession is not in the cuts right now at this juncture. iran there really on
is a company itself has said they want to have an individual quote offered before the 300 collective quote offer. so we are actually looking for the former opec meeting in algiers next month, really to have no concrete move, so to speak. so what is most important for the market is to look at the rhetoric they may give for people. this is what happened as june went by. the opec meeting was somewhat with a more consensus, a more united opec. we may see that again. that may set the stage for possibly individual quota and collective quota in november. rishaad: right, the point being that libya is coming back slowly but surely --
surely. nigeria producing more. iraq wanting to produce 5% more as well. this could bring oil down. barnabas: well, you are asking that is the story, if the case. it is the truth production levels in the middle east has been going up. saudi arabia itself producing levels as well. higher.ey are producing libya is going up slowly but surely. there is one site of the equation, u.s. production has felt. the entire production, climate, is largely being based on what the is producing and what middle east is producing. and bringing the cuts that could be united states, production in the u.s. has fallen. thein all, we do hope that informer meeting with the official meeting by the opec, to give more views on what the
production is going to happen. for now, everybody's interest, the producers especially is to increase. it could be a strategy that i employ to obtain market share in this case, but surely we should $50 at higher oil prices, for 2016. given the fact that the cost of production in the u.s. has been falling, and any uptick in prices will persuade prices to come back again. rishaad: does this change the tactic in producing, because of this great debate going on? there is liquidity not so much on equity markets am a but how does that work in the gold price? barnabas: well for the gold atce, there are two caps
play right now. one is looking at the higher fomc rate hike. september or december. this is another question analysts wish to answer. but we are actually looking for a december rate hike by 25 basis points. for oil,e a bear case you will concentrate on the rate hike. that means more expensive dollar, more bearish case of gold. but if you look at what is happening in 2016, just look at history. we have bouts of stock lending fears in china. we had falling oil prices. we also have the markup from the end of 2016. the u.s. presidential elections, the brexit. everyone can agree what we can say, the truth is a full-blown consequence of the brexit is not here yet. that is because of the delay in triggering of article 50. so keep that in mind.
if the triggering of article 50 may happen in 2017, that will be another wildcard into the global economy once again. due toould be supported save haven reasons in our view. so even though it is falling during of what happened that yellen speech just last week as well as from the increased probability for the rate hike. all in all, this should persist in 2016. , thank you. we will take a break. apple facing a hefty tax hike in europe. we look at the alleged sweetheart deal in ireland. ♪
♪ rishaad: you are back with trending business. apple could be hit with a tax bill running into the billions of european union investigation into its business in ireland. rosalind has that story. it has the european commission we are talking about, investigating into what we are apparently hearing. rosalind: this has been going on two years now. this decision could say that ireland gave it a legal aid to apple. helplegal aid to apple, to apple's financial space. so in 2014, the eu said apple was improperly designed to give apple a financial boost, what they are saying is apple could have been given extra help in terms of taxes in return for the creating jobs in iron is.
this will allow for special arrangements for special companies. the tax will runs hundreds of millions of dollars up to perhaps $19 billion dollars of taxes for apple. rishaad: sweetheart deal being played. rosalind: it is not the first time a european has come into look at the tax. they were looking at other countries and companies as well. mcsweeney saidd that google and apple set up in ireland for low taxes and creating jobs. he is happy to lose billions of taxes if it makes jobs. others say it is a small country, why should you pay taxes and be penalized compared to a big company? so whether big company should penalize small companies, what it means in terms of taxes. and the u.s. as well. rishaad: it could be a bit of a fight. thank you.
♪ announcer: from our studios in new york city, this is "charlie rose." charlie: kenneth branagh is here. he is currently starring in and codirecting macbeth at the armory here in new york city. the production comes here from manchester, england has received extraordinary reviews. michael billington of the guardian says he evoked golden memories of olivier. here is a look at the trailer.